Tennessee Supreme Court Reverses Course on Damages Caps

In a decision handed down in October from the Tennessee Supreme Court, the Court has vacated a prior decision by Hamilton County Circuit Judge Thomas, holding that the damages caps imposed through Tennessee’s tort reforms were unconstitutional. Despite support for Judge Thomas’ decision among the Tennessee legal community and tort reform opponents across the country, the Tennessee Supreme Court ultimately determined that Judge Thomas’ opinion prematurely addressed the issue of the cap on tort damages and that the decision should be vacated.

As previously discussed on this blog, in March of this year, Judge Thomas issued a stunning decision, determining that damages caps imposed on plaintiffs claiming non-economic damages in personal injury cases were unconstitutional. The limit – $750,000 – was statutorily imposed by the Tennessee legislature through the 2011 tort reform initiative known as the Tennessee Civil Justice Act. Judge Thomas held that since plaintiffs are entitled to a right to trial by jury, and one aspect of the jury’s determination is the question of the amount and nature of damages, the damages cap unconstitutionally limited the jury’s authority. Accordingly, he struck down the cap.

Judge Thomas’ decision on the damages cap came in a summary judgment ruling and before the case had actually been heard by a jury or damages decided upon. After Judge Thomas issued his decision, the defendants in the case, AT&T and its employees, immediately appealed the decision through a process known as an interlocutory appeal. Under this type of appeal, Judge Thomas retained the case, but it was temporarily halted while the Tennessee Supreme Court considered whether Judge Thomas’ ruling was correct.

On appeal, the Tennessee Supreme Court steered clear of commenting on the constitutionality of the damages cap, instead focusing on the unique procedural circumstances of the case. The Court held that although Judge Thomas had ruled on the applicability of the damages cap, this ruling was premature because the issue was not “ripe.” Under the ripeness doctrine, courts decide only those issues before them and not issues that may come up in the future. Here, the jury had not yet decided the amount of damages it wanted to award the plaintiffs, or even if the plaintiffs deserved any damages at all. Accordingly, it was not yet clear that the damages cap would act as any sort of limitation on the jury’s ability to act within its own authority. Since the damages cap had not yet “limited” the jury, the Tennessee Supreme Court determined that it was too early for Judge Thomas to rule on whether such a limit was unconstitutional. To do so was a hypothetical consideration of a future issue.

Instead, the Tennessee Supreme Court instructed that Judge Thomas’ ruling should be vacated and that the case should proceed as usual. If the jury ultimately awarded the plaintiffs an award that exceeded the damages cap, Judge Thomas would then have cause to reconsider whether the damages cap was an unconstitutional limitation.

With this decision, the Tennessee Supreme Court has placed back into question whether a plaintiff is entitled to receive damages in excess of the tort reform cap if a jury awards such damages. While this may lead to uncertainty when plaintiffs are considering whether to advocate for higher damages awards, it is likely that defendants, including corporations often subject to tort claims, will continue to proceed cautiously and with anticipation that damages awards may increase. Indeed, despite Judge Thomas’ ruling having been overturned, it is likely that his reasoning and ultimate decision caused many other judges in the state to take note.

Committed personal injury attorney Eric Beasley has extensive experience representing injured plaintiffs in tort actions throughout Tennessee. If you have been injured and are seeking knowledgeable and effective legal assistance, contact the Law Office of Eric Beasley today at 615-859-2223.